Is Apple’s PR Bruised?

 Is Apples PR Bruised?What to think of Apple? To hear stock analysts and business anchors talk, one would think Goliath had just taken a severe hit to the head. Apple has been the undisputed giant of tech for so long that the slightest waver on its feet has everyone talking about how the mighty may soon be falling.

True, profits are down – about 18 percent this quarter, and the first decline for Apple in a decade. Speculation that the company might slope downward following the demise of leader Steve Jobs didn’t come to pass immediately, but the birth of competitive, and cheaper, products are starting to pose a threat. And there are no new products coming from Apple, which is bad news for a company that caters to consumers mad for the latest in tech devices.

Another first for Apple is having to borrow money. The explanation? Rather than face taxes on bringing in offshore assets, Apple will take a loan to pay $100 billion to shareholders by 2015, which pleases some, but perplexes others. Bottom line: should Apple be in crisis mode or business as usual?

THE PR VERDICT: “C” (Distinctly OK) for Apple. The news isn’t good, but then again it isn’t all rotten.

THE PR TAKEAWAY: A company’s reputation can precede, and quiet, speculation. Apple may be wavering in its long-held number one slot, but one of the company’s priorities has been building a brand. People don’t speak of phones; they talk about iPhones and lead iLives. Consumers still see Apple products as cool and a cut above the rest despite their ubiquity.  While cheaper products may come around, it will take far more than that to put a dent in Apple’s brand loyalty. Apple’s PR should continue to polish its image and brand and let the stock price see-saw of its own accord. Apple’s upward unrelating share price climb had to come to an end at some point. Best thing is to pause and catch a PR breath.

J.C. Penney: Everything Old is New Again

 J.C. Penney: Everything Old is New Again

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.
(Pictured: ousted CEO Ron Johnson.)

Shareholders may be asking the board of J.C. Penney “Penny for your thoughts?” Or perhaps demanding it, after the startling news of a CEO switcheroo this past Monday. That CEO Ron Johnson was ousted is not a surprise. The real surprise came when the board announced Johnson’s replacement: his predecessor, Myron Ullman, who was fired by that same board in 2011.

When Johnson arrived he moved forward with a radical makeover for Penney: boutique stores under one roof. This idea included securing Martha Stewart, who assured Johnson she could step out of her exclusive contract with Macy’s. That plan blew up like a bad soufflé, with Johnson in court admitting he’d never read the fine print of Stewart’s contract with Macy’s, and thousands of Martha’s products being court-barred from shelves.

Now comes news that Johnson is being replaced by the very predecessor he took over from, ostensibly because the man wasn’t doing a bang-up job to begin with. JCP’s price tumbled 10.3 percent after a brief spike when Johnson’s termination was announced. Shareholders aren’t just calling for a replacement for him, but for the entire board. This is practically a textbook example of PR “dont’s.”

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.

THE PR TAKEAWAY: When playing poker, keep your hand facing in – no need to show all cards to the other players. A new CEO, a drastic new plan; where were the checkpoints along the way? With only one of the ten J.C. Penney board members having retail experience, no wonder the organization is in trouble. The board clearly realized that it needed to oust Johnson to stem the falling revenues and bad publicity, but the answer is rarely to go back in time. As Plan B is nothing more than a return to former issues, then it may be worth delaying until a more palatable alternative is found. If the board insists on reuniting with a former CEO, then coach the ill-chosen replacement not to admit that he was re-hired only last weekend and has no plan to speak of. Showing the losing hand is always a losing tactic and in this case, likely to cost JCP a pretty penny.

Abercrombie & Fitch Caught With Their PR Pants Down

 Abercrombie & Fitch Caught With Their PR Pants Down

The PR Verdict: “F” (Full Fiasco) for Abercrombie & Fitch.

Abercrombie & Fitch, the sexually provocative clothier for mainstream America, is in trouble again. While this time it’s not a class action lawsuit by minority employees (as happened in 2004), the current problem could unravel in ugly ways.

While working at an A&F store last year, Benjamine Bowers alleges in a legal filing that the company referred him to a modeling agent. According to the complaint, Bowers was flown to Mississippi for a photo shoot, where the agent allegedly said his photos needed a more “relaxed” look. Any suggestions? Why not masturbate in front of the camera, so the photo captures your expression immediately after orgasm? Oh, and could you do the whole thing naked, please?

The employee obligiged but is now suing the modeling agent and A&F for $1 million in damages. No comment so far from the agent or the retailer despite some embarrassing headlines. Bowers claims he was used and that the photos were never intended to help his career. Instead, he claims it only served to give the modeling agent a “cheap thrill.”

The PR Verdict: “F” (Full Fiasco) for Abercrombie & Fitch. When a public company hits the headlines, the PR needs to move fast. What happened here?

PR Takeaway: Distance the firm from the allegation, faster than you can unbutton a polo shirt. Clarify that the allegation concerns a third party contractor and that A&F’s own investigation has begun. Reiterate that the allegation reflects behavior that is clearly unacceptable and that the agent’s contract has been suspended pending investigation. Remind the media that employees and contractors are expected to adhere to a code of conduct (if there is one). Above all, move quickly before consumer groups, religious groups, activist shareholders, and the dreaded class action lawyers swarm for their piece of action. And keep your boxer shorts on at all times.

To read more click here.

Can A&F get past these latest allegations without a smear campaign? Give us your PR Verdict in Speak Your Mind, below.

 

JP Morgan: We Told You So

told you so JP Morgan: We Told You So

The PR Verdict: “A” for CtW - "We told you so."

“We told you so “ seems to be the key message from the CtW Investment Group to JP Morgan.  CtW, a shareholder representing union funds, claims it was concerned over 12 months ago at what it saw as “lax and out dated” risk management controls at JP Morgan.  Those concerns were laid out to senior management. But then, oops, a year later, the storied financial institution announced a trading loss of over $2 billion and a market value drop of more than $25 billion.

CtW wins the PR prize. The Executive Director of the group told the NY Times that it had expressed its concerns to a JPM board member and the former Chief Risk Officer.  The main complaint?  That the three-person board responsible for monitoring overall risk lacked the necessary expertise to oversee the function.

CtW says that ultimately the problem reflected an overall unhealthy deference to CEO Jamie Dimon and his Chief Risk Officer.  With this sentiment resonating with pundits, it seems the party is well and truly over for banking’s favorite CEO.

The PR Verdict:  “A” (Gold Star!) for CtW, punching above its weight. By saying “we told you so” they look like the smartest ones in the room.

PR Takeaway:  Capitalize on every PR opportunity.  By coming out with these revelations now, CtW claims the upper hand and grabs the PR advantage.  Describing JP Morgan as having an “old fashioned model of governance”,  CtW legitimately puts itself at the forefront of the reforms JP Morgan will be announcing.  While it’s an uncomfortable place for JP Morgan, it’s a great place for CtW and its public profile.

To read more, click here.